Maryland Leaders Want to Divest Pension Fund Holdings Tied to Sudan

A coalition of Maryland leaders, including Lt. Gov. Anthony G. Brown (D), yesterday called for the state's pension system to divest its holdings in companies that do business in Sudan.

State Treasurer Nancy K. Kopp (D), Comptroller Peter Franchot (D) and several legislators joined Brown at a news conference to urge the passage of the 2007 Darfur Protection Act, which would add Maryland to a growing list of states that have begun divesting or restricting investments in Sudan.

Brown, who cited human rights atrocities in the country's Darfur region, said the bill is designed to "protect the weakest among us."

The bill authorizes the managers of the pension system to ask companies in its $36 billion portfolio that have business or economic ties to the Sudanese government to end their business dealings. If the companies continue to do business with Sudan, the managers are authorized to pull the state's investments with those companies.

The measure would also prohibit the state pension system from making future investments with companies connected to Sudan.

As of Jan. 31, Maryland had $203.7 million in funds and accounts that hold securities invested in 14 companies that had ties to the government of Sudan. The companies are foreign-based, such as Royal Dutch Shell and Lukoil, according to state treasury officials.

Sudan has been in a civil war for more than 20 years, but the violence in the western region of the country has left as many as 450,000 people dead. The country's Arab government has attempted to crush a rebel movement by destroying villages across Darfur, leaving more than 2.5 million homeless and languishing in refugee camps. The U.S. government has labeled the Sudanese government's actions genocide.

Maggie Tiernan, senior national field organizer with the Sudan Divestment Task Force, a nonprofit organization dedicated to the issue, said her group is encouraging the state to completely divest, as six other states -- California, Connecticut, Illinois, Maine, New Jersey and Oregon -- have done.

"The hope is that we can economically punish the government of Sudan [and] at the same time deprive the government of the means to carry out the genocide," Tiernan said.

Kopp said the bill was written to avoid some of the constitutional questions that were recently raised when a federal judge struck down an Illinois law.

Illinois was one of the first states to enact a law that prohibited investing state funds in companies with ties to Sudan.

A judge ruled this month that the Illinois law interferes with Congress's authority over foreign commerce.

Sen. Verna L. Jones (D-Baltimore), the Maryland bill's sponsor, said the measure was "socially conscious but fiscally prudent."

Jones, who chairs the Legislative Black Caucus of Maryland, said she is more confident of the bill's passage this year. A measure that called for immediate divestiture failed last year.

"We have put forth one of the most collaborative efforts," Jones said, noting the participation of the treasurer, comptroller and Gov. Martin O'Malley's administration.

Senate President Thomas V. Mike Miller Jr. (D-Calvert) said that if "the case is made" to lawmakers about the atrocities in Darfur, "then certainly we will look at the matter [of divesting] most favorably."

But he said the challenge will be one of education, to get the issue on their radar screens. "They have to be educated," Miller said. "There's probably two of the 47 members of the Senate who understand the conditions that exist in Sudan."

Sudan divestiture bills passed the Virginia House and Senate last month but died in a conference committee that failed to reach a compromise on the different versions.

"To get that close to the finish line and not go over it was pretty tough," said Sen. Kenneth T. Cuccinelli (R-Fairfax), who sponsored the divestment plan with Del. Shannon R. Valentine (D-Lynchburg). The bill would have directed the Virginia Retirement System to divest eight stocks from its $54 billion pension portfolio -- a total of 0.2 percent of the state's holdings, or about $106 million.